How Fed policies thwart economic equality
By Karen Shaw Petrou
With the first 100 tumultuous days of the Trump administration behind us and the Federal Reserve Board considering monetary-policy tightening, it is clear that U.S. bankers face a very different policy framework than just a few months ago. What happens next will drive not only bank profitability, but also and, still more importantly, political stability. This is because the next round of monetary- and regulatory-policy actions will have profound impact on whether the U.S. income and wealth gap grows even wider between rich and poor. Our new research demonstrates that regulatory and monetary policymakers must consider economic equality as they contemplate realigning the pillars of U.S. financial policy. If they don’t, then the economy won’t grow in a sustainable way and political discontent will get still worse.